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How Digital Transformation has Changed the Ways Small Businesses Operate

Digital Transformation Strategy

Digital transformation is no longer an option. It has become a necessity, especially for small businesses. A few years back, digital transformation was seen as a way for companies to gain a competitive advantage. Today, it is a matter of survival. 

In no small measure, the COVID-19 pandemic has amplified the digital divide already present in the small business market; hence, small businesses have no other option than to buckle up their digital transformation initiatives. 

Small businesses that are digitally progressives see it as a means of building flexibility. For those lagging and have shown a nonchalant attitude towards technological integration, digital transformation has become the answer to business stability and survival.

According to the Small Business Digitalization and COVID-19 Survey of June 2020, 33% of small businesses expect to be digitized by 31% – 50% of their companies, while 12% expect more than 50% of digitalization in 2021.

What is Digital Transformation?

Digital transformation is the process of using new technologies and revamping legacy systems to improve the way operations are carried out. In the line of small business digital transformation, you can look at from the angle of digitalization of businesses, with a focus on a customer-centric business strategy aimed at transforming internal operations using digital technologies, such as cloud, mobility, social, augmented/virtual reality, Internet of Things (IoT), and analytics or artificial intelligence (AI), for better engagement with customers, partners, and employees.

According to WalkMe, small businesses embark on a digital transformation strategy to essentially change customer expectations. It revolves around how they utilize technology, people, and processes to achieve their goals and satisfy their customers. If adequately implemented, digital transformation can lead to new business models and revenue streams for small businesses.

For a small business, the digital transformation initiative must be taken by the CEO with the support of the CIO and other managers. Collaboration should be the hallmark of any successful digital transformation initiative since it will cut across departments to enhance the alignment of business objectives and application development models.

Digital Small Business Transformation

How has digital transformation come into play in small businesses? By integrating technology, small companies understood the need for a comprehensive organizational change and learned to use technology to improve performance. 

The use of AMPs (analytical, mobile tools and applications, and platforms) has come into full swing and is completely changing small business operations, especially in North America and Europe; added to that is the competitive dynamics you see within many industries.

Small businesses have realized the need to rework processes, which is achieved through APIs, data, analytics, machine learning, and other technologies to reinvent corporate processes. This has enhanced lower costs, reduced cycle times, and increased quality. 

Financial constraints and the non-availability of a digitally skilled workforce are two things that have seriously affected small business digital transformation. Hence anything that can lead to success with lower costs is grabbed with both hands. Small businesses also ventured into the use of RPA to streamline back-office processes such as accounting and legal.

Though the number of global small businesses that have transformed into digital natives may still be small, the most important thing is that the effort is at top gear, especially in North America and Western Europe.

Emerging technology is enabling small businesses to pivot on their traditional business models. They are now more focused on how more value is created and delivered in a given industry. 

The opportunity to rethink business models with the final aim of providing value is repositioning small business operations. Small businesses are deploying big data to gain veritable insights that enhance prompt and real-time decision-making. 

Digital transformation has enabled small businesses to automate some tedious tasks like managing business data. This has gone a long way in eliminating errors. There is also the opportunity to use task and assignment control tools to assign and monitor tasks for added value to customers and the organization. 

Critical errors cause operational setbacks; digital transformation helps small businesses to avoid this unnecessary waste of human and financial resources. The ultimate achievement here is efficiency and accuracy. 

Cultural/Organizational Transformation 

To a large extent, what small businesses have gained from digital transformation is organizational cultural change. Small businesses succeeding in their digital transformation initiatives have been able to transform organizational mindsets, processes, talent, and capabilities. 

You cannot have a digital culture without agile workflows, experimentation, learning and re-learning, decentralized decision-making, and collaboration. These factors constantly lead to employees resisting digital transformation. 

While transformation is majorly focused on improving customer experience and the integration of technology, the company culture and the requisite organizational change can greatly impact the success of any digital transformation initiative.


There is no doubt that small business digital transformation has been contributing greatly to the economies of countries such as the U.S., U.K., and Germany in the past years. However, the additional transformation of small businesses will bring about an increase in their GDP growth. A study says that SMBs in the Asia Pacific region could contribute US$2.6 to 3.1 trillion to Asia Pacific’s GDP by 2024.   

Data Integration
Digital Transformation in Manufacturing
digital technology

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